Trial opens for pair accused of bilking municipalities

Butch Comegys/Staff Photographer
P.J. McLaine, in back, a principal at the now-defunct Acker Associates, walks to the William J. Nealon Federal Building and U.S. Courthouse with his attorney Sal Cognetti in Scranton in 2011.

EASTON - Two Lackawanna County businessmen pocketed lavish bonuses while a Lehigh Valley town they promised to save money through a streetlight privatization project forked over more than $800,000 to them for work that was never done, the Northampton County district attorney said Monday.

Standing before a jury of seven men and five women on day one of the trial of P.J. McLaine and Robert J. Kearns in Easton, District Attorney John Morganelli repeatedly made mention of the $832,460 in taxpayer money Bethlehem Township officials gave the owners of Lackawanna County-based Municipal Energy Managers to buy utility poles and streetlights in their town from PPL.

Instead, while officials believed they would save money through the privatization plan, the town ended up being saddled with a $1.1 million loan it took out to pay MEM to get the project off the ground in 2007. Meanwhile McLaine and Kearns gave themselves six-figure bonuses from the company's corporate bank account, Morganelli said.

"These defendants essentially did nothing to complete the project," the district attorney said in his effort to convince the jury to convict them on charges of theft, conspiracy, and the misapplication of entrusted government property.

If found guilty on all three counts, they face a maximum sentence of 16 years in state prison.

"It's not a hard case. It's not a complicated case," he said, adding that it was not "merely bad business."

They "took public money and used it for themselves," the district attorney said.

Elsewhere, the now-defunct company did streetlight buyback projects within Carbondale, Scranton, and Wilkes-Barre.

The company promised it could cut municipalities overall bill to PPL, including power, through buying back their streetlights from the utility and maintaining them. The move would lower electric rates and provide other cost savings, the company claimed.

MEM had several contracts throughout the region, including with Hazleton and West Hazleton. Tamaqua, Coaldale, Lansford, Jim Thorpe, Mahanoy City and Nesquehoning have filed suit against MEM and its principals.

Officials in Carbondale and Wilkes-Barre, who had the conversion work to privatization completed and their lights maintained by MEM, opted to eventually pull the plug on the company and complained of shoddy service.

MEM also has been the target of several civil lawsuits, including a pending suit with Bethlehem Township, a former company president, and a former contractor.

Like the criminal case, the civil ligation contends McLaine and Kearns diverted corporate funds for their own personal use. And, Scranton officials were at odds over $657,000 the company claims the city owns it.

During the more than two-hour jury selection process on Monday in Northampton County Court, McLaine, 66, of Elmhurst, and Kearns, 49, of Scranton, did not speak to each other and avoided eye contact.

Seated at the defense table, they scribbled notes on legal pads while their attorneys - Paul Walker of Scranton and Jim Swetz of Stroudsburg - and the district attorney picked from a pool of about 60 Northampton County residents to serve on the jury.

McLaine came to prominence during the public corruption trial of former Lackawanna County Commissioner Robert Cordaro, who was convicted of taking bribes in exchange for doling out lucrative county contracts and is now serving an 11-year sentence in federal prison.

McLaine, a former principal of the defunct civil engineering firm Acker Associates of Moscow, testified during Cordaro's trial that he funneled $10,000-a-month in bribes to the commissioner so that Acker wouldn't lose county contracts.

After the district attorney finished his opening arguments, Swetz argued that MEM successfully delivered what it promised to 11 municipalities, including Scranton, the city of Bethlehem and Hazleton.

However in Bethlehem Township, MEM was not able to fulfill its agreement because of delays caused by township officials and PPL, Swetz said.

"PPL said, we don't want you touching our poles," Swetz said.

Presided over by Northampton County Judge Leonard Zito, the trial will resume this morning. Bethlehem Township officials and a PPL lawyer are expected to testify for the prosecution, Morganelli said.

smcconnell@timesshamrock.com

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